Tech cooperation with China is not necessarily accommodationist and can deliver competitive benefits to the United States. 

    Unmanaged, the U.S.-China competition in artificial intelligence (AI) could create dangerous fissures between these two great powers that could lead to military conflict. For all the talk of decoupling between the United States and China, they are still economically interconnected in more ways than one. Neither side would benefit from a costly war.

    Washington’s ultimate challenge in this competition, which is somewhat similar to the one it experienced with the Soviet Union, is to preserve the peace with Beijing while not being shy about maintaining and leveraging its technological edge. It is an approach based on a modified form of Reagan’s mantra, “peace through strength, which can be called “Peace Through Edge.” There is plenty of room for pragmatic cooperation in this competition, including frameworks to manage the responsible development and deployment of AI.

    Rather than viewing the competition as a zero-sum game, Washington and Beijing can foster conditions where their respective innovations drive economic growth and technological leadership while avoiding destabilizing actions that threaten long-term prosperity. Strategic rivalry in AI can be a powerful driver for progress if guided by market-driven frameworks that reward innovation and penalize unsafe or irresponsible behavior.

1.     A Broader Competition

    The U.S.-China competition over AI development is here to stay and will likely intensify over the forthcoming years. It is, after all, part of a broader and more fundamental struggle between two great powers who strongly disagree over how the world order should look and how societies should govern themselves. Each side sees technological dominance or self-sufficiency as integral to supporting its vision and goals.

    With respect to AI, the U.S. model allows companies, in general, to control industrial development and governance-related matters without cumbersome regulations that hinder innovation. The Chinese model, on the other hand, is state-led. While it also promotes innovation, it is centrally controlled and sensitive to the interests and preferences of the ruling Chinese Communist Party.

    For its part, the United States seems keen to continue to target China’s semiconductor sector. Semiconductors are obviously essential for developing AI. Washington has sought to limit the export of chipmaking equipment, software tools, and high-bandwidth memory despite the potential supply chain disruptions this might cause worldwide and the difficult conversations with U.S. allies (mainly in Asia) who might be (and, in some cases, already have been) affected by these measures.

    In his second term, President Donald Trump will reverse many of his predecessor’s policies at home and abroad. Yet, challenging China’s ambitions for semiconductor self-sufficiency will not be one of them. In fact, his administration will be more aggressive toward Chinese technology and semiconductors and impose stricter export bans or sanctions, targeting more sectors of China’s high-tech industry.

    However, China is not helpless or without options. It remains a key player in AI and the global semiconductor industry. It holds the majority of global AI patents (with almost 13,000 granted, though few are as impactful as those of the United States), and its language models are gaining recognition worldwide. Although its state-led companies are behind leaders like Nvidia in AI chip design and ASML in chipmaking tools, China’s play is to use its competitive advantage in enormous capacity to dominate the legacy node market (the older semiconductor technologies), which is much less targeted by U.S. restrictions. China also plans to increase its investments in domestic production by launching a $47 billion semiconductor fund. In addition, it will continue to circumvent U.S. restrictions by using AI cloud services to exploit loopholes in export controls on high-performance computer chips.

1.     The Military Dimension

    Perhaps of greatest concern to the United States in its tech competition with China is the latter’s ability to use advanced semiconductors to power its AI systems and further develop its military capabilities—particularly its autonomous weapons. For the United States, maintaining global leadership in AI and semiconductor manufacturing is considered a matter of national security. However, true leadership comes not from restricting control, as in the current U.S. approach, but from fostering market-driven innovation and responsibly leveraging private-sector competition to shape the future of AI.

    The United States and China are intent on achieving self-sufficiency in AI for understandable reasons. While AI does not change the fundamental nature of war, it has revolutionized how military forces, state and non-state alike, are approaching war.

    The famous Ancient Roman aphorism suggests that “if you want peace, prepare for war.” This means that ensuring combat readiness is always paramount. Here, AI could do wonders. Making decisions on tactical operations, force structure, or budgeting requires large volumes of diverse data from many different sources, including satellite imagery, field reports, intelligence briefings, and social media monitoring. Processing and analyzing that data and then making predictions can be a slow, uncertain, and inefficient process. AI can bring speed, clarity, and efficiency to those processes.

    By analyzing historical data alongside real-time information, AI can identify potential threats before they fully materialize, as well as generate a response to such threats. This early warning capability is particularly valuable in cyberspace, where AI systems continuously learn from previous attacks to strengthen digital defenses. For example, consider how AI has used such processes within military training. Militaries worldwide are now integrating AI-driven training programs that simulate advanced combat scenarios, providing personnel with the necessary skills to operate effectively in complex environments.

    The applications of AI on the battlefield are not theoretical or aspirational. They are real and driving current tactical and strategic dynamics. Look at the conflict in Ukraine or Israel’s war against Hamas and Hezbollah, or how the U.S. Fifth Fleet has relied recently on technological innovation and AI to pursue its maritime security mission.

    AI has been instrumental in Ukrainian attempts to counter Russia’s invasion. It has allowed them to process and analyze vast amounts of data regarding the location and capabilities of Russian forces much more quickly and accurately. Israel itself has relied heavily on AI to generate Hamas and Hezbollah targets. Through a program called Lavender, the Israeli military’s Unit 8200 has been able to create a large database of individuals who could be members of Hamas and Hezbollah. An AI-based decision support system called “the Gospel” can identify physical infrastructure that militants could use. Israel has also used self-piloting drones for close-quarters indoor combat to target individuals in Gaza and Lebanon and, after engagement, to confirm their killing.

    The automation of aspects of collection and processing has been invaluable in the maritime domain. For example, U.S. Naval Forces Central Command, the naval branch of the U.S. Central Command, has used AI to secure regional waters under its responsibility. Task Force 59 has been at the forefront of this effort, enhancing its situational awareness through AI-assisted unmanned systems by creating and updating in real-time a common operational picture derived from multiple sensors.

1.     Arms Control Redux

    AI is the backbone of emerging military technologies, such as autonomous weapons, cyber warfare, and surveillance systems. Naturally, the rapid pace of AI development has triggered an arms race between nations, increasing tensions and frictions on the global stage. As each research milestone unlocks a significant boost in capability, the resulting volatility will destabilize traditional governance channels, pressuring national authorities to adapt to their peers or risk falling behind.

    To address these challenges, the United States can lead the creation of open-source, responsible AI frameworks, leveraging internet-based standards to establish transparent, ethical, and interoperable AI systems. The decentralized nature of these standards and protocols means they are inherently market-driven, which demands an adherence to the liberal economic and cultural values we see in the West. This paradox of open development in the face of increased peer-group competition creates an asymmetric advantage for the United States and its peers in the new age of digital industrialization.

    If the United States chooses to embrace novel governance methodologies while leveraging distributed systems and auditable-ledger design, these protocols will be built for resilience, ensuring a long-lasting alignment with its very own technological leadership. By driving the adoption of these open-source frameworks throughout the global system, the United States positions its own peers and ecosystems as the global default, cementing Western-led influence while also ensuring the responsible development of AI.

    While cooperation with China on AI might seem accommodationist for some, the United States gains a significant advantage by controlling the architecture of these frameworks. Open-source standards ensure interoperability and scalability, but they also allow American companies to benefit from fairer markets and stronger property rights. This strategy enables the United States to stabilize AI proliferation while using the guise of collaboration to reinforce its technological and geopolitical dominance.